Posted: 02 Aug 2015 09:40 PM PDT
Malaysian Prime Minister Najib Razak is trying to contain fallout from investigations into the troubled state investment fund 1Malaysia Development Bhd., which has amassed $11 billion in debt. Here are five things to know.
Why is Mr. Najib under scrutiny?
In addition to questions raised about Mr. Najib's oversight of 1MDB, investigators looking into the fund have traced nearly $700 million of deposits into what they believe are his personal bank accounts, The Wall Street Journal reported. The original source of the money is unclear and the government investigation doesn't detail what happened to the money that allegedly went into Mr. Najib's personal accounts. The turn marked the first time Mr. Najib had been directly connected to the 1MDB probes. Mr. Najib denied taking any money for personal gain.
Why did Mr. Najib shake up his cabinet?
Mr. Najib dismissed five ministers—including his deputy, Muhyiddin Yassin—and a deputy minister. Mr. Muhyiddin had publicly raised questions about the government's decision to suspend two local publications over their reporting on 1MDB. Mr. Najib said the cabinet change was needed for "strength and unity." Wan Saiful Wan Jan, chief executive of Malaysia-based think tank Institute for Democracy and Economic Affairs, said of the shakeup, "instead of providing good answers to the many criticisms, the prime minister has chosen to remove his critics."
Why were the two newspapers closed down?
The Edge Weekly and The Edge Financial Daily, both owned by The Edge Media Group, have been reporting on the troubles faced by 1MDB. Mr. Najib's new deputy premier, Ahmad Zahid Hamidi, suspended the publications for three months because the extensive reporting on 1MDB was deemed to be "prejudicial or likely to be prejudicial to public order." The company said it will launch a court challenge.
Has anyone been charged with a crime?
Authorities have detained five people, none identified or charged, to assist in the investigation. The central bank is also seeking two former 1MDB executive directors to assist in the investigation while a bipartisan parliamentary committee probing 1MDB's activities has also summoned Low Taek Jho, a young Malaysian financier who helped set up the fund. Mr. Low previously has denied wrongdoing and has said he never had a formal position at 1MDB, characterizing his role as an occasional adviser.
What is ahead for parliament's probe?
The committee hearings have been halted after Mr. Najib appointed four members from the committee to his cabinet, meaning they can no longer be on the panel. The committee will have to appoint new members in October before proceedings can continue. The committee was scrutinizing an interim report on the fund prepared by the auditor-general and was scheduled to interview 1MDB top executives in August.
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